In the first budget of the republican Nepal presented by Maoist-led government, the finance minister has brought forward an inflated budget by inserting several populist slogans. He has also stated his intention to lure more investment to push the economic growth to seven percent in the current fiscal year.
Finance Minister Dr Baburam Bhattarai unveiled a whopping Rs. 236.15 billion budget for the fiscal year 2008-09, Friday, at the Constituent Assembly.
Out of the total expenditure, recurrent expenditure is estimated at Rs. 128 billion 516.5 million, capital expenditure at Rs. 91 billion 311 million while Rs. 16 billion 189.3 million have been allocated for payment of principal and interest of loans.
The budget size itself is higher by 39.7 percent compared with the total allocation of Fiscal Year 2007/08 and 44.5 percent more than the revised expenditure of that year.
Defending the huge size of the budget, the minister said, "Some risks must be taken when you want to take a leap forward.'
The recurrent expenditure size has been increased by 40.6 percent while the capital expenditure has surged by 64.5 percent. The amount allocated for loan repayment has been lowered by 1 percent against the revised expenditure of the previous year.
Out of the total expenditure, Finance Minister Dr Baburam Bhattarai has proposed Rs.111 billion 824.9 million (47.38 percent) for general administration and Rs. 124 billion 199 million (52.62 percent) for development related programs.
The budget has aimed to raise Rs 129 billion revenue (up from Rs 105 billion collected in the previous fiscal year) and obtain Rs 47 billion of foreign grants and Rs 18 billion of foreign loan. The budget deficit will stand at Rs 41 billion – of which the budget aims to raise Rs 12 billion from reforms in revenue administration and Rs 3 billion from existing cash reserve. The remaining Rs 25 billion will be mobilized as internal loan.
Addressing the constituent assembly session, FM Bhattarai said government has given topmost priority to agriculture, water resources, tourism, human resource development and industrialization.
The minister aims that the budget will push the economic growth rate to 7 percent from current 5.6 percent. The growth rate in agriculture sector is expected to be at 4.5 percent and non agriculture sector at 8.3 percent. Inflation rate is estimated to be around 7.5 percent.
The budget has allocated Rs 5.91 billion for agriculture, Rs 5 billion for irrigation, Rs 1.52 billion for industrial sector, Rs 13.91 billion for road development, Rs 5.27 billion for rural infrastructure development, Rs 38 billion (44 percent more than past year) for education and Rs 15 billion for health sector.
He has announced a number of populist programs. He has increased monthly allowance for elderly, widows, and disabled people and introduced slogans like Hamro Gaun Ramro Gaun (Our Village, Beautiful Village), New Nepal Healthy Nepal and so on. He has also set aside millions of rupees for providing relief to conflict-victims and families of martyrs.
It has not substantially changed tax rates. The budget has also announced Voluntary Disclosure Scheme to extract more revenue. nepalnews.com sd/ia Sep 19 08
